Another App Store milestone, and another opportunity to take stock of its impact. Roughly five months after the virtual storefront crossed the 1 billion iPhone and iPod touch application download threshold, Apple announced Monday that downloads have now exceeded the 2 billion mark--according to Apple CEO Steve Jobs, consumers downloaded half a billion apps in the third quarter alone, while AppleInsider crunches the numbers to determine that users are now downloading an average of 6.3 million apps per day, up from 4.1 million in the App Store's first year. Apple adds that there are now over 85,000 applications in the store and more than 125,000 programmers in its iPhone Developer Program.
What does it all mean from a revenue standpoint? In a research report published Thursday, Sanford C. Bernstein & Co. analyst Toni Sacconaghi estimates the App Store currently generates between $60 million and $110 million in quarterly revenue for Apple--a tiny fraction of the computing giant's total Q3 revenues of $8.34 billion. Sacconaghi believes the App Store contributes between two cents and four cents a share in profit to Apple per quarter--minus the 30 percent cut Apple takes on App Store downloads, the analyst estimates that iPhone software developers currently generate between $140 million and $250 million a quarter.
Sacconaghi adds that the average cost of a premium iPhone app is now about $3.00--mobile ad exchange Mobclix reports that while paid downloads make up 77.3 percent of the total App Store inventory, consumers continue to download more free apps. Apple notes that more than 50 million iPhone and iPod touch customers in 77 countries are downloading applications in 20 categories, including games, business, news, sports, health, reference and travel--however, Mobclix contends that games and entertainment alone represent more than 35 percent of all apps, with the smallest five categories (in order of increasing size: weather, medical, finance, photography and social networking) making up just 6.2 percent combined.
Determining what apps are worth to developers is one thing--determining what they're worth to consumers is another. According to a recent survey by mobile application development services provider Flurry, bargain-priced novelty apps lose their appeal virtually overnight, with news and reference apps retaining the most user attention over the long haul. The Flurry survey--which covers iPhone apps as well as the BlackBerry, Android and JavaME platforms--indicates that news apps are used at a rate of 11 times per week, followed by reference apps (10.7 times a week), weather apps (10.5 times a week), books (10 times a week) and lifestyle apps (8.0 times a week). Entertainment apps fared the most poorly over time, translating to just 2.6 uses per week on average. Here's hoping the next billion App Store downloads have more staying power. -Jason